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Small businesses a ‘cash cow’ for rapidly expanding city hall budget: group

After its report found that city hall’s spending outstrips population growth, a business group is calling on municipal politicians to limit expenses and focus on core services, not social housing and similar programs.

But observers say curbing affordable housing costs will not solve the city’s budget woes, noting that housing and other support programs help avoid other, longer-term costs linked to caring for impoverished people.

The report by the Canadian Federation of Independent Business says that Calgary’s operating budget swelled three times faster than its population over an 11-year period.

These spending hikes are hurting small businesses, which pay five times more in property taxes than households, said Richard Truscott, the group’s Alberta director.

“Small businesses are getting sick of being a cash cow to pay for these ever-rising operating budgets,” Truscott said.

Calgary’s population jumped by 27 per cent from 2000 to 2011, while its spending on city services spiked by 87 per cent, according to the business group, which based its figures on Statistics Canada and provincial data.

Using these figures, number-crunchers ranked Calgary eighth-worst among the 20 largest Alberta municipalities on spending restraint. Edmonton placed 11th.

CFIB wants Alberta municipalities, not just Calgary, to tie annual spending increases to the rate of population growth, focus on core city services, rein in employee wages and consider hiring private contractors to offer some services.

Trash collection, water, sewage, policing, firefighting and road repair have been among the services traditionally considered core to municipal governments. But many cities, like Calgary, have been spending in areas outside their traditional spheres of jurisdiction, such as social housing.

Truscott said city hall should take a hard look at these services and either trim spending or “control the rate of growth in a much more disciplined fashion than they have in the past.”

But for people living in poverty, housing costs are their biggest expenses, said Joe Ceci, a former city councillor and co-ordinator for the non-profit group Action to End Poverty in Alberta.

Ceci’s group found that poverty costs Alberta taxpayers $7.1 to $9.5 billion a year in higher health care, criminal justice, education and related expenses. To cut those costs, governments must address the root causes of poverty, which includes the lack of affordable housing, he said.

The anti-poverty group and another non-profit, Vibrant Communities Calgary, released their own report Wednesday, calling for more affordable housing units, a higher minimum wage and the elimination of school fees from kindergarten to Grade 12, among many other recommendations.

On the wider question of city spending, Ceci said council spent money in line with the priorities of taxpayers when he served from 1995 to 2010. He said it’s something the current field of politicians has done over the past three years with spending on services, transit and recreation.

Ceci called CFIB “armchair quarterbacks” whose values he does not share.

“They are very narrowly focused on delivering value to their members, which is profit to business,” he said.

Ald. Gael MacLeod said controlling affordable housing costs would do little to address spending concerns at city hall because they account for such a small share of the total city budget.

“We have been looking hard at all options (to curb spending). It’s a big challenge, it really is,” MacLeod said. “I’m not fond of tax increases, like anybody else. What else do we do? Do we not fix the roof?”

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